MUTTA STEELAGE PRIVATE LIMITED, MUMBAI V. INCOME TAX OFFICER 5(2)(3), MUMBAI

ITA 1911/MUM/2018

• Counselvise Citation: [2018] 121 COUNSELVISE.COM (IT) 7170 (ITAT-MUMBAI)
• Duration Of Justice: 2 month(s) 19 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 15-06-2018
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: SMC
• Assessment Year: 2011-2012
• Appeal Filed On: 26-03-2018
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: N HEMALATHA
• Keywords: Bogus purchase
• Section: 147; 148; 139

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCHES SMC , MUMBAI BEFORE S HRI R.C. SHARMA (AM) AND SHRI RAM LAL NEGI (JM) ITA NO. 1911/MUM/2018 ASSESSMENT Y EAR: 2011 - 12 M/S MUTTA STEELAGE PVT. LTD., RIDHI APARTMENT, SHOP NO. 7, 10 TH KHETWADI BACK ROAD, MUMBAI - 400004 PAN: AAFCM1258G VS. THE ITO - 5(2)(3), ROOM NO. 566, 5 TH FLOOR, AAYKAR BHAVAN, M.K. ROAD, MUMBAI (APPELLANT) (RESPONDENT) ASSESSEE BY : NONE REVENUE BY : MS. N. HEMALATHA (DR) DATE OF HEARING: 1 4/06 /201 8 DATE OF PRONOUNCEMENT: 15 / 06 /201 8 O R D E R PER RAM LAL NEGI, JM THIS APPEAL HAS BEEN FILED BY THE ASSESSEE AGAINST ORDER DATED 30.11.2017 PASSED BY THE COMMISSIONER OF INCOME TAX (APPEALS) (FOR SHORT THE CIT (A)) - 10 , MUMBAI , FOR THE A S S ESSMENT YEAR 2011 - 12 , WHEREBY THE LD. CIT (A) HAS DISMISSED THE APPEAL FILED BY THE ASSESSEE AGAINST ASSESSMENT ORDER PASSED U/S 143 (3) READ WITH SECTION 147 OF THE INCOME TAX ACT, 1961 (FOR SHORT THE A CT). 2. BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE COMPANY ENGAGED IN THE BUSINESS OF TRADING IN FERROUS AND NON - FERROUS METAL, FILED ITS RETUR N OF INCOME FOR THE ASSESSMENT Y E AR UNDER CONSIDERATION DECLARING THE TOTAL INCOME OF RS. 9,89,683/ - . THE RETURN WAS PROCESSED U/S 1 43 (1) OF THE ACT. SUBSEQUENTLY, THE ASSESSMENT WAS RE - OPENED U/S 147 OF THE ACT ON T HE GROUND THAT DURING THE F.Y. 2010 - 11 RELEVANT TO THE ASSESSMENT YEAR UNDER CONSIDERATION. THE ASSESSEE OBTAINED BOGUS BILLS FROM THREE HAWALA PARTIES NAMELY M/S S.K. IMP EX, M/S VIJAY TRAINING COMPANY, M/S BHAGYALAXMI STEEL INDUSTRIES 2 ITA N O. 1911 / MUM/2018 ASSESSMENT YEAR: 2011 - 12 AMOUNTING TO RS. 86,15,256/ - . IN RESPONSE TO THE NOTICE U/S 148, THE AUTHORIZED REPRESENTATIVE OF THE ASSESSEE ATTENDED THE PROCEEDINGS AND SUBMITTED THAT THE RETURN FILED BY THE ASSESSEE U/S 139 OF THE ACT MAY BE TREATED AS THE RETURN FILED IN RESPONSE TO NOTICE U/S 148 OF THE ACT. DURING ASSESSMENT PROCEEDINGS, THE ASSESSEE SUBMITTED THE DETAILS OF PURCHASES, STOCK, VOUCHERS, SALE INVOICE AND BANK STATEMENTS ETC. TO ESTABLISH THE GENUINENESS OF THE PURCHASES, HOWEVER THE AO HOLDING THAT THE AFORESAID DOCUMENTS DO NOT ESTABLISH THE GENUINENESS OF THE TRANSACTION ASKED THE ASSESSEE TO PRODUCE THE PARTIES. BUT THE ASSESSEE FAILED TO PRODUCE THE PARTIES BEFORE THE AO. ACCORDINGLY, THE AO RELYING ON THE DECISION OF HONBLE GUJARAT HIGH COURT IN THE CASE OF CIT VS. SIMIT P. SHETH 356 ITR 451 (GUJ) MADE ADDITION OF 12.5% OF THE TOTAL AMOUNT OF BOGUS PURCHASES TO THE INCOME OF THE ASSESSEE. THE ASSESSEE AGGRIEVED BY THE ASSESSMENT ORDER CHALLENGED THE SAME BEFORE THE CIT (A). THE LD. CIT (A) AFTER HEARING THE ASSESSEE CONFIRMED THE ADDITION OF 12.5% MADE BY THE AO. AGAINST THE SAID ORDER THE ASSESSEE IN APPEAL BEFORE THE TRIBUNAL. 3. T HE ASSESSEE HAS PREFERRED THIS APPEAL BEFORE THE TRIBUNAL ON THE FO LLOWING EFFECTIVE GROUND : - THE LD. COMMISSIONER OF INCOME TAX (APPEALS) [HEREINAFTER REFERRED TO AS LD. CIT (A) HAS ERRED IN UPHOLDING THE ORDER OF THE LD. ASSESSING OFFICER AND DISALLOWING THE PURCHASE TO THE EXTENT OF 12.5% OF RS. 86,15,256/ - AMOUNT ING TO RS. 10,76,907/ - ON ACCOUNT OF PURCHASE FROM NON GENUINE PURCHASE PARTIES. 4. THIS CASE WAS FIXED FOR HEARING ON 14.06.2018. ON THE SAID DATE, WHEN THE CASE WAS CALLED OUT FOR HEARING, NONE APPEARED ON BEHALF OF THE ASSESSEE. EVEN NO APPLICATION F OR ADJOURNMENT WAS RECEIVED . WE NOTICE THAT THE ASSESSEE HAD NOT APPEARED ON THE LAST DATE OF HEARING AND ACCORDINGLY THE CASE WAS ADJOURNED AND POSTED FOR 14.06 2018 AND T HE PARTIES WERE ACCORDINGLY 3 ITA N O. 1911 / MUM/2018 ASSESSMENT YEAR: 2011 - 12 INFORMED. SINCE, THE ASSESSEE HAS FAILED TO APPEAR BEFOR E THE TRIBUNAL DESPITE SERVICE OF NOTICE , WE DECIDED TO DISPOSE OF THE APPEAL ON THE BASIS OF MATERIAL AVAILABLE ON RECORD AFTER HEARING THE DEPARTMENTAL REPRESENTATIVE (DR). 5. BEFORE US, THE LD. DEPARTMENTAL REPRESENTATIVE (DR) SUBMITTED THAT SINCE THE ASSESSEE HAS FAILED TO DISCHARGE THE ONUS OF PROVING GENUINENESS OF TRANSACTION BEFORE THE AUTHORITIES BELOW , T HE LD. CIT (A) HAS RIGHTLY CONFIRMED THE ADDITION OF 12.5% OF THE TOTAL AMOUNT OF BOGUS PURCHASES IN QUESTION . THE LD. DR FURTHER SUBMITTED THAT SINCE THE LD. CIT(A) HAS CONFIRMED THE ADDITION OF 12.5% BY RELYING ON THE JUDGMENT OF THE HONBLE GUJARAT HIGH COURT , THERE IS NO MERIT IN THE APPEAL OF THE ASSESSEE. 6 . WE HAVE PERUSED THE MATERIAL ON RECORD. THE ONLY GRIEVANCE OF THE ASSESSEE IS THAT T HE LD. CIT(A) HAS WRONGLY CONFIRMED THE ADDITION MADE BY THE AO. WE NOTICE THAT THE AO H A S MADE ADDITION IN QUESTION BECAUSE THE ASSESSEE HAS FAILED TO DISCHARGE THE ONUS OF ESTABLISH ING THE GENUINENESS OF THE TRANSACTION . NO EVIDENCE WAS POINTED OUT BY TH E ASSESSEE EVEN DURING THE APPELLATE PROCEEDINGS. WE FURTHER NOTICE THAT SINCE THE ASSESSEE HAS FAILED TO PROVE ACTUAL DELIVERY OF GOODS BY ADDUCING COGENT AND CONVINCING EVIDENCE, THE AUTHORITIES BELOW HA VE RIGHTLY HELD THAT THE PURCHASES IN QUESTION ARE BOGUS AND NO MATERIAL WAS IN FACT, DELIVERED BY THE AFORESAID BOGUS PARTIES. 7. SO FAR AS THE ADDITION IS CONCERNED, SINCE THE AO HAS NOT REJECTED THE SALES, THE LD. CIT(A) HAS RIGHTLY CONFIRMED THE ADDITION OF 12.5% OF THE TOTAL AMOUNT OF BOGUS PURCHASE S, IN ACCORDANCE WITH THE LAW LAID DOWN BY THE HONBLE GUJARAT HIGH COURT IN THE CASE OF CIT VS. SIMIT P. SHETH (SUPRA). THE LD. CIT(A) HAS CONFIRMED THE ADDITION ON THE GROUND THAT THE AO HAS MADE THE ADDITION TAKING IN TO CONSIDERATION THE VAT EVADED AND PROFIT EARNED BY THE ASSESSEE BY PURCHASING THE MATERIAL IN GREY MARKET AND OBTAINING BOGUS ENTRIES FROM THE AFORESAID HAWALA DEALERS TO JUSTIFY THE PURCHASES SO MADE . 4 ITA N O. 1911 / MUM/2018 ASSESSMENT YEAR: 2011 - 12 HENCE, WE DO NOT FIND ANY REASON TO INTERFERE WITH THE FINDINGS OF THE LD. CIT(A). WE THEREFORE, UPHOLD THE FINDINGS OF THE LD. CIT(A) AND DISMISS THE SOLE GROUND OF APPEAL OF THE ASSESSEE. IN THE RESULT, APPEAL FILED BY THE ASSESSEE FOR A SSESSMENT YEAR 2011 - 20 12 IS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 15 TH JUNE , 2 018 . SD/ - SD/ - ( R.C. SHARMA ) ( RAM LAL NEGI ) ACCOUNTANT MEMBER JUDICIAL MEMBER MUMBAI ; DATED: 15 / 06 / 201 8 ALINDRA, PS / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT. 3. ( ) / THE CIT(A) - 4. / CIT 5. , , / DR, ITAT, MUMBAI 6. / GUARD FILE . / BY ORDER, //TRUE COPY// / (DY./ASSTT. REGISTRAR) , / ITAT, MUMBAI